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Going With My Gut

Every once in a while, I get a strong hunch about a closing, and I had one about a particular matter where I was representing the buyers. They balked --repeatedly-- about the closing costs, and I had an inkling that they were going to bring less to the closing than I directed.

So they did, shaving $3,000 off the certified check to the seller they were instructed to bring to the table (their mortgage broker and real estate agent concurred that my numbers were “way too high”).  So when the lender pulled about $3,000 out of the mortgage proceeds to cover the tax escrow, my clients were unable to pay the seller everything they owed.

The buyers, mollified and embarrassed (I think), stammered that they had the money in their regular checking account, and could they please write a personal check to cover the $3,000?

The contract prohibited personal checks of over $500, so the seller was not wrong to refuse $3,000.  I suggested that buyers go to the nearest branch of their bank and get another check while --sigh-- we all wait, but the seller’s attorney had a real bright idea!  He wanted the buyers to write me the personal check for $3,000 and I in turn could write his client an escrow check for the amount, which was perfectly acceptable to the seller.

Wait, what? You want me to cover a clients’ personal check with other people’s escrow funds? How many ways can you say malpractice and breach of fiduciary duty?

But why go that route of acting all afraid of losing my license? Instead I said: “I don’t have any escrow checks with me today.”

That’s because five minutes before I left the office, I trusted my gut and took the checkbook out of my briefcase (where it always resides), and put it squarely on my desk!  I couldn’t have told you at that moment why the move felt so right, but as I drove back after the closing, I had a hearty chuckle.

Happy Birthday, Michael!

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